China 10Y Yield Remains Near 3-Month High

China’s 10-year government bond yield edged higher to around 1.81% on Friday, rebounding from a two-week low hit in the previous session as markets assessed potential de-escalation in the Middle East and strong economic data from China. In the latest development, US President Donald Trump said the pause on attacks targeting Iran’s energy infrastructure would be extended into April, adding that talks with Tehran were “going very well.” However, an Iranian official rejected a reported US proposal to end the conflict as “one-sided and unfair.” Meanwhile, China’s industrial profits surged 15.2% year-on-year to CNY 1.02 trillion in the first two months of 2026, a sharp rebound from 0.6% growth in 2025. The figures point to growing momentum in China’s recovery, even as geopolitical tensions continue to cloud the global outlook. On the diplomatic front, US President Donald Trump’s first visit to China in eight years has been rescheduled for May?14–15 after being delayed due to the Iran war.

China’s 10-year government bond yield edged down to around 1.82%, trading in a narrow range as investors weighed conflicting developments on Middle East tensions. US President Donald Trump delayed planned strikes on Iranian energy infrastructure after what he described as productive talks between the two countries. However, Iran's foreign ministry denied the talks shortly thereafter, adding that the country's conditions to end the war had not changed. Tehran also said it had launched new attacks on US targets, while Israel continued its strikes on Iran, keeping geopolitical risks elevated and clouding the outlook for energy prices. Meanwhile, China stands to gain from the conflict due to its lower energy dependence and its edge in renewables. China's Premier Li also vowed to boost imports of high-quality foreign goods and promote balanced trade, while PBoC Governor Pan sought to calm concerns over China’s trade surplus.

China’s 10-year government bond yield rose to around 1.84% on Monday, extending the previous week’s gains as surging oil prices from the Iran war fueled inflation concerns. The conflict, now in its fourth week, has intensified as President Trump traded escalating threats with Iran, while Israel signaled plans for “weeks” more fighting, rattling global markets. Last week, the People's Bank of China kept rates unchanged, signaling a cautious stance amid rising external risks and limiting room for further easing. Despite the external shock, some analysts see China’s economy supported by relatively resilient domestic conditions and noted the country has buffers to absorb higher energy costs and could benefit from stronger demand for green energy exports. At the same time, officials used the China Development Forum to reinforce policy stability and continued economic opening, with Premier Li Qiang pledging greater access for foreign firms and more balanced trade with global partners.